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Guide to UK adverse credit loans
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Adverse Credit Loans
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Adverse credit loans are designed for homeowners that are struggling to be accepted for a standard loan.
If you have an adverse credit rating due to county court judgements or mortgage arrears, this is the only borrowing option left.
Face Facts
You should treat adverse credit loans as a last resort, there are no luxuries such as low interest rates or extended repayment terms to be had here.
The harsh truth behind Adverse Credit Loans is default and you’re homeless, it's that black and white.
If you’re already experiencing financial difficulties, don’t take out an adverse credit loan, it'll only push you further down a financial cul-de-sac.
Contact the Citizens Advice Bureau instead and seek help with your money problems.
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Thanks for the warning. I’ve defaulted in the past and I’m struggling to be accepted for anything. Will I qualify for an adverse credit loan?
Quite possibly.
Adverse credit loans do not discriminate against applicants with poor credit histories who are trying to turn their credit file around. Provided that you faultlessly keep up with repayments, an adverse credit loan can help to repair a damaged credit file.
Check the interest rate and terms of any loan thoroughly before signing anything though, your home is very much at risk when you enter into an adverse credit loan agreement.
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But the interest rates are huge, right?
Correct.
Adverse Credit Loans can be higher than average (around the 15% mark), which is due to the considerable risk to the lender that most applicants pose. The lack of options open to the adverse credit loan applicant means that you’ll just have to accept this.
With the high interest rates in mind, don’t over stretch your budget on a steep repayment schedule for your loan, and don’t be tempted to take a bigger loan than you need.
Should you consistently default on loan repayments then the lender has the right to repossess your property as payment in full of the loan amount. When you’re weighing up the possibility of applying for an adverse credit loan, this factor should be foremost in your thoughts. The consequences are considerably grave for you and your family should anything go wrong.
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My budget adds up, I can afford this loan. Where do I go from here?
Freedom Finance (www.freedomfinance.co.uk) is a reknowned broker that accepts applications from those with blemished credit histories and county court judgements. They will allow you to borrow between £5,000 and £100,000 using your home as collateral.
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